Gm 545 Project Part 2 Essay
GM 545 Business Economics
Professor: William Mason
Project Part II
February 1, 2012Gutierrez
Chapter 15, Question 11
A) The graph given to us depicts the GDP of five decades and indicates how consumption (consumers), government spending, gross private domestic investment, and net exports have contributed to the economy for the past 50 years. We look at the percentage calculation of each component of GDP. We realize that Government spending is the most stable and after that comes Gross private domestic investment. According to our graph, in 1965 the smallest contribution to GDP was Net Exports with 0.78% of total GDP. These computations were done by taking the sectors contribution and dividing it by the GDP with respect to the year. In 2005, Consumption has the largest contribution to GDP of 70.19% of total GDP.
The Gross Domestic Product is an important statistic of the US economy because it compares our economical standing with another countries economical standing. It indicates whether our economy is growing quicker or slower than the quarter before. It is used as a tool for economic planning and budgeting in the private sector and government agencies in the US. What’s more is this information provides a comparison with the standard of living from one country to another. …show more content…
The concern is double-counting for the intermediate goods and finished good. For example, the output of Samsung is the input of Best Buy. If both accounted for the item separately, then there are inaccuracies of merging the accounts. Undoubtedly there are controls that circumvent such inaccuracies. The most important control activities involve segregation of duties, proper authorization of transactions and activities, adequate documents and records, physical control over assets and records, and independent checks on performance (economic
Professor: William Mason
Project Part II
February 1, 2012Gutierrez
Chapter 15, Question 11
A) The graph given to us depicts the GDP of five decades and indicates how consumption (consumers), government spending, gross private domestic investment, and net exports have contributed to the economy for the past 50 years. We look at the percentage calculation of each component of GDP. We realize that Government spending is the most stable and after that comes Gross private domestic investment. According to our graph, in 1965 the smallest contribution to GDP was Net Exports with 0.78% of total GDP. These computations were done by taking the sectors contribution and dividing it by the GDP with respect to the year. In 2005, Consumption has the largest contribution to GDP of 70.19% of total GDP.
The Gross Domestic Product is an important statistic of the US economy because it compares our economical standing with another countries economical standing. It indicates whether our economy is growing quicker or slower than the quarter before. It is used as a tool for economic planning and budgeting in the private sector and government agencies in the US. What’s more is this information provides a comparison with the standard of living from one country to another. …show more content…
The concern is double-counting for the intermediate goods and finished good. For example, the output of Samsung is the input of Best Buy. If both accounted for the item separately, then there are inaccuracies of merging the accounts. Undoubtedly there are controls that circumvent such inaccuracies. The most important control activities involve segregation of duties, proper authorization of transactions and activities, adequate documents and records, physical control over assets and records, and independent checks on performance (economic